In the Dark on Job Training: Federal Job-Training Programs Have a Record of Failure

About the Authors

There are two plans before Congress (S.
1627 and H.R. 1261) to reauthorize the Workforce Investment Act of
1998 (WIA)--the primary legislation for employment and training
programs at the U.S. Department of Labor. Although the House bill
does include some worthwhile changes that might make the program
more cost-effective, neither bill addresses the failure of these
training programs to meaningfully raise the incomes of
participants.

Legislating in the Dark

Congress faces considerable uncertainty
about the effectiveness of WIA programs because, to date, there has
been no reliable assessment of WIA or of the system of "one-stop"
employment service centers it created. Without being able to
identify what works with WIA, Congress is legislating in the dark.
In the 1998 WIA Act, Congress mandated that the Labor Department
conduct a multi-site impact evaluation of WIA by September 2005,
using random assignment and control groups to assure an accurate
measurement of WIA's effects. Almost six years later, the Labor
Department has made little progress in meeting this deadline.

Past Failures

The
history of federally funded job-training programs strongly suggests
that WIA will not substantially raise participants' incomes.1 Similar programs
funded under the Job Training Partnership Act (JTPA) of 1982 were
found to be largely ineffective.2

Three types of JTPA activities were
evaluated: classroom training, on-the-job training and job-search
assistance, and "other services" tailored to participants on the
basis of their age.3
These programs were ineffective at raising the incomes of adult
males or of male and female youths: Only the "other services"
elements appear to have had a sustainable impact on adult
women.

A
program's effect on participants' hourly wages is an important
indicator in any evaluation of job-training programs: If
job-training programs increase the skills of participants,
employers should then be willing to pay program graduates higher
hourly wages in return for increased productivity. The JTPA
programs did not have a statistically measurable effect on the
wages of adults (the hourly wages of youths were not measured).
This indicates that--in the opinion of employers--JTPA did not
increase the skills of participants.

The
failure of employment and training programs is too frequently
blamed on managerial problems, without any consideration of the
possibility that government-funded training is fundamentally
flawed.4

Over
several decades, Congress has "reformed" federal job-training
programs numerous times. Each of these reforms promised to fix
federal job-training programs--to no effect. According to Professor
Gordon Lafer at the University of Oregon Labor Education and
Research Center, "As successive generations of job training
programs fail to produce the hoped-for results, policy makers have
cycled through a stock repertoire of procedural fixes that promise
to solve the problem."5 For WIA, these procedural fixes fall
under the mantra of "increased flexibility" and "One-Stop Career
Centers." However, none of these fixes are likely to improve the
effectiveness of job-training programs. Professor Lafer reasonably
concludes that the "lesson of the National JTPA Study is that there
is no managerial fix which can create dramatically more effective
training programs."6

What Should Be Done

The
type of job training that a person will receive is best decided by
that individual, based on his or her abilities and interests, and
by employers, who know what skills they need. If government
training fails to reflect the priorities of employers or the
interests and natural abilities of trainees, those trainees are
likely to be diverted into careers for which there is little demand
or for which they are ill-suited. The record suggests that past
federal jobs programs may have fallen into this trap, and there is
as yet no solid evidence that WIA has avoided that same snare.

Even
if it is working exactly as intended, WIA may still be missing the
real skills shortage in the current labor market. In a 2001 survey
of manufacturers, two-thirds reported that a lack of qualified
applicants for production jobs had caused them to have difficulties
maintaining production levels and meeting customer demand for their
products--in the midst of a recession that hit manufacturers
particularly hard.7

Nearly all of these employers rejected at
least some job applicants. Yet when these employers were asked the
reasons behind most of the rejected production job applications,
nearly one-third reported rejecting applications due to a lack of
adequate reading and writing ability and one-fifth reported
rejecting applicants with inadequate math skills. More than
two-thirds reported rejecting applicants because of a lack of
"basic employability skills," such as reliable attendance and
punctuality. Less than 8 percent of manufacturing employers,
however, cited the lack of a degree or of vocational training as a
reason for rejecting applicants.

These results indicate that vocational
training is not what is lacking: What is lacking is the kind of
basic knowledge associated with a high school degree. If that is
the case, vocational training offered by WIA addresses a relatively
minor concern for employers--one that bars relatively few workers
from employment.

The
Bush Administration has proposed several administrative changes to
WIA, including a consolidation of adult training and
displaced-worker funding into a unified program for adult workers.
Simplifying government finances and reducing the risk of service
duplication and conflicts between similar programs is always a
worthwhile task, although the Administration's claim that it will
be able to double the number of persons served by WIA is
dubious.

The
number of persons served by WIA is irrelevant if the program itself
does little to improve the participants' employment prospects.
Given the absence of reliable data on WIA's effectiveness and the
track record of similar federal job-training programs, WIA should
be eventually eliminated. WIA originally received an appropriation
of over $5.93 billion in fiscal year (FY) 2004, but rescissions
trimmed that number to $5.15 billion. Given the need for closer
control over federal government spending, WIA funding should be
further reduced for FY 2005.

The
proposal to loosen the job search requirement--allowing some WIA
recipients to go directly into intensive training without first
undergoing a self-directed job search--should be rejected. This
change is likely to increase the use of expensive training programs
(whose value remains in doubt) and to increase federal spending
without necessarily improving job prospects.

The
dismal failure of federal job-training programs should lead
Congress to abolish WIA--along with other federal jobs-training
programs--after a decent interval that will allow state and local
governments to evaluate their own programs and to determine which
services they will continue and how they will be funded.

David Muhlhausen, Ph.D., is Senior
Policy Analyst in the Center for Data Analysis, and Paul Kersey is Bradley
Visiting Fellow in Labor Policy in the Thomas A. Roe Institute for
Economic Policy Studies, at The Heritage Foundation.

1.For more information
about the performance history of federal job-training programs, see
David B. Muhlhausen, "Congress Spends Billions on Ineffective
Job-Training Programs," Heritage Foundation Backgrounder No. 1597,
October 1, 2002, at
http://www.heritage.org/Research/Labor/bg1597.cfm.